Financial Mistakes to Avoid

Ten years after Karen Mendelsohn and her husband, Harold, were married, he went to take a run … and never came back.

Karen says, ""He suffered a sudden heart attack. It was horrible. And they couldn't revive him."

The second blow - neither she nor their two young children were named as the beneficiaries on his pension. He had neglected to switch it from his parents. And when Karen asked them …

She explains, "They said 'no.' They said if our son left us as the beneficiaries, he wanted us to have the money. It makes my heart."

Consumer Reports says financial oversights are all too common.

Tobie Stanger with Consumer Reports says, "Our survey found that in the last five years, 86 percent of
respondents had not checked or updated important estate documents, including wills and beneficiary designations."

Financial planner Gayle Lob says another frequent mistake couples make is having only one person in charge of the finances.

Gayle says, "What if somebody gets disabled? What if one of them dies?"

Consumer Reports confirms that "money stumble" is common with married couples. Its survey found with 70 percent, only one spouse knew key details about their accounts.

Tobie explains, "And if you are over 60 and have adult children, it's time to let them know where that important information is as well."

Other "money stumbles" - 50% of homeowners did not have enough insurance to cover full replacement of personal property at today's prices.

And more than 70% didn't have at least three months of living expenses set aside in case of job loss or illness.

Tobie explains, "You may not solve everything all at once, but just taking those first simple steps may save you and your family a lot of heartache down the road."

As for Karen, it took a lawsuit to get her husband's death benefits. She says she hopes telling her story will encourage others to get their finances in order.

In addition to regularly updating estate-planning documents, Consumer Reports recommends designating a file cabinet or safety deposit box for your will, insurance policies, and a list of all important account and investment information.

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